Maxi Cash IPO - To Buy or Not

Michelle Chia, the spokesperson for Maxi Cash!

Amid the Chaos of Europe and US, there is one catalist listing that caught everyone's attention and familiar to us Singaporeans - Maxi Cash! You can see a press release here.

I have seen many forums and read up a bit on the news and its prospectus; and the views are inconsistent on whether this IPO will soar on its debut...

Let's look at its corporate profile:

Pawnbroker Maxi-Cash Financial Services Corporation Ltd Operations are concentrated on 2 business segments - Pawnbroking and Retail and trading of pre-owned jewellery and
watches.

Maxi Cash is a subsidiary of mainboard-listed jewellery retailer and property developer Aspial Corporation - formerly Lee Hwa Holdings.

And the Summarized Financial Statements are here below:

Now lets talk about the Pros and Cons of this company and finally an opinion by myself.

The Pros:

1. Well established market position (13%) of the whole industry; 24 locations islandwide near amenities such as Bus Interchanges and Mrt Stations.
2. Strong Brand Name - thats why all the people in the forums are talking about it!
3. Experienced Management Team in Jewellery Industry; Parent company is aspial corporation too.
4. Different Feel - A "bank-like" modern feel sets it apart from its competitors & thus, more likely to attract youngsters and business people.
5. Anti-cyclical industry -
   People poor people have to pawn = Earn Interest!
   People rich people buy jewellery = Earn Capital gains!

The Cons:

1. Short period of time from startup to listing (not enough time to analyse it thoroughly)
2. Stigma against such slow moving stocks where Operations are in Singapore (Old Chang Kee, Mary Chia etc)
3. 33% Premium to NTA -> Fundamentally overpriced
4. Subject to Gold, Jewellery asset prices + low interest rate changes
5. Competitive environment with many old established pawnshops around.

An Independent Opinion

I think despite the global woes, Maxi Cash is a well-known company and the price may soar in the first few days. 

I will rate it as a short term Buy and Sell within days or even 1 day because of many uncertainness behind it + everyday you may have bad news from whichever region that will come crashing down the stock.

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